Accounting is a challenge to any entrepreneur, especially if you’ve just set up your business. Keeping your books in order can help you avoid financial problems and incurring penalties in Singapore.
If you’re new to accounting, you will soon realise that it takes a little time to get used to it. However, you need to learn quickly, because as your business grows, your accounts become more complex. In this blog, I’ll present 7 crucial accounting tips for you.
Use Accounting Tools
In the beginning, you may choose to handle the accounting side of the business yourself by using accounting tools. The best thing is that accounting software is listed as a qualifying item under the Productivity and Innovation Credit Scheme. This means that you will enjoy a 400% corporate tax rebate for your Singapore business when you buy and use such a software for your business.
So, instead of doing things the old fashioned way, you should use technology to make your life a whole lot easier.
However, doing it on your own is is only a temporary measure. Once your business starts to grow, you’re going to need help.
Hire an Accountant
There comes a point in the growth of your business, where you need to relinquish control of your accounting responsibilities. At this point, you need to hire a professional to do your job.
The cost of an accountant will be well worth it because your finances will be in order and tax season won’t be such a hectic time for you.You’ll also have more time to concentrate on the more strategic aspects of your business.
Review the Books
Hiring an accountant doesn’t mean you should forget about accounting. As a business owner, you should know the in-and outflow of capital in your company. That is why you should periodically review the books. It will help you catch errors and fraud in a timely manner.
Trusting your accountant with all your finances without any system of checks and balances can also be your undoing. These are mistakes that can cost you in the long run.
Active participation is needed on your part for the smooth functioning of your business. If you’re absent minded, then people will try to take advantage of that.
Simplify Your Finances
If you want your accounting to be simple, then you’ll need to simplify your finances. Even if you’re intending to run a sole proprietorship, never mix your personal finances with that of your business. It’s a rookie mistake that many entrepreneurs make.
Maintain a separate bank account and credit card for your business purposes. If you’re going to take a client out to lunch, then use this credit card. Always pay your bills on time and keep a record of the payments. Maintaining proper records is the key to good accounting. Your books will automatically be in order if you abide by these rules.
Hire a Payroll Manager
Payroll is an important aspect of accounting that you need to be extra careful about. There are many things that can go wrong with it. You could accidently underpay your employees or delay the payment of their salaries.
If this happens more than a few times, then your employees will become disgruntled and find someplace else to work. Worse, still, if you fail to pay within 7 working days of the end of the salary period, then you could be in for a S$3000 – S$15,000 fine and/or 6 months in prison.
Hiring a dedicated payroll manager will help you avoid such problems. When your employees are receiving the right salary at the right time, they will be less demoralised and less inclined to seek greener pastures. So, getting your payroll process right is in a way a kind of an employee retention program.
Or Outsource Your Accounting Tasks
You don’t necessarily need to have an in-house accounting and payroll department. You can outsource this function to a qualified payroll specialist so that they will be able to handle these duties in a better way. At the end of the day, you save yourself a headcount as well as the associated costs.
Accounting is a major function of any business. These tips will help you do it more proficiently. Once you simplify your finances and of the way you can concentrate on expanding your business.